Forward-Looking Statements
The plans, performance forecasts, and strategies appearing in this material are based on the judgment of the management inview of data obtained as of the date this material was released. Please note that these forecasts may differ materially from
actual performance due to risks and uncertain factors such as those listed below:
•
•
•••
•
•

Intensification of price competition in the marketplace
Change in economic trends surrounding our business
Major fluctuations in capital markets
Fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen and the U.S. dollar
Increases in prices of raw materials
Change in the tax environment
CCEJ's ability to realize production efficiencies and to implement capital expenditures at the levels and times planned bymanagement;• CCEJ's ability to market and distribute effectively• Uncertain factors other than those above
The information in this presentation is provided for informational purposes and should not be construed as a solicitation of
an investment in our securities.
You should rely on your own independent examination of us before investing in any securities issued by our company.

A World-Class Japanese Bottler
Encouraging Results in 2013
• Discussion of Full-Year 2013 Normalized Results

Positioning for Growth in 2014
• 2014 Full-Year Plan

Reasons to Believe• Growth, Synergies, Infrastructure, People

Our
Q&A

Roadmap for Sustainable Growth

ENCOURAGINGRESULTS IN

2013

Our

Roadmap for Sustainable Growth

2013 Still Early in Our Roadmap

OI Margin+1 pt
2013-20142012-2013

Storming

Forming

Define & deploy
new bus. model

Speed ofintegration: 250+
projects

Identifying
synergies &positioning forgrowth

OI Margin+1-2 pts
2014-2015

Norming

OI Margin+1-2 pts
2015-20172017- Tokyo Olympic
Games & Beyond

Accelerating

Performing

Refine &optimize new
business model

Approaching
global bottler
performancelevelsProcess reengineering& launch of ERP
system while
delivering first results

Exploiting newarchitecture ascompetitive
advantage to drivesynergies & growth

Meet & exceed
world-classbottler levels

A world-class
Japanese bottler
on the world stage

Strategic Priorities
GrowthRealign against
current strengthand future
GrowthSpeed

Synergies

Unprecedented
speed and scopeof change

Reduce costs
and drive
efficiency

Infrastructure

PeopleCreate optimal
operatingstructure

Build a worldclass, modernized
workforceWe are on Track and Delivering Early Results2013 Results

One+
Roadmap for
Sustainable
Growth

+1.60% (unit case)+0.18% (physical case)+0.6 ppt volume+0.4 ppt value

Volume growthahead of industry
performance

OperatingMargin+0.06 ppt vs. Plan
OI grew +2% vs. Plan

Improving
operating margin

Capabilities• Top 120 Leader
Training: Phase 1 done
• Metrics & Scorecards

Strong focus on
improving
capabilities

MeasureVolumeShare**Q4 Intage, OTC

ProgressCheckQ4: Initial Signs of Market Share Improvement

Full YearQ4

284,014 (BAPC)+0.18%+1.53%

425,099 (UC)

+1.56%+4.26%

Volume Share vs. Prior Year

CCEJ

Full Year

Q4

Volume-0.3+0.6

Value-0.3+0.4+0.9

Dec

Nov

Oct

Sep

Aug

JunMayAprMar

Feb

Jan

Jul
(0.9)

(0.5)

vs. Prior Year

Value Share vs. Prior Year

+0.7
+0.2(0.8)

Market Share*+0.9+0.8

JanFebMar
AprMayJunJulAug
Sep
Oct
Nov
Dec

Sales
Volumevs. Prior Year2013 Actual(0.6)(0.5) (0.3)

(0.7)

CCEJ
Source: Intage, OTC channel

Focus on Execution is Starting to Deliver Results
Sales Equipment Net Increase

Volume & Commercial NSR

Change from 2012 endcumulative

32 Top SKU Coverage vs. Plan

Market ShareExpanding New Route-to-Market Model
Reorganized Commercial StructureRapidly and Actively Integrating… As Committed
Projects

Office relocation complete. 2,000+ people moved. Legacy HQ offices closed.
Production company consolidation complete. From 4 companies to 1 CCEJP.
Next phase of legal entity consolidation started (26 on Day One to 11 by 2015).
Divestment of non-core asset Mikuni Wine approved by BOD.
Initial manager-level VSP complete. Additional plan confirmed by BOD.

Rapidly and Actively Integrating… As Committed
Capabilities and Infrastructure

Commercial reorganization complete; Model market program expanding
New Chief Information Officer appointed
“CokeOne” world-class ERP approved by BOD. Kick-off on February 14, 2014.
11 of top 120 leaders are external hires from within Japan
Initial employee engagement surveys confirm alignment and understanding of
One+ Roadmap plan and targets

Delivering Operating Income Above Plan
• Growing sales volume in a year of transition and integration• Delivering supply chain synergies to partially offset pricing environment• Accelerating operating expense savings in 2013 to grow OI margin versus plan(BAPC) (,000 cases)
Net Revenue

Vs.
Plan*

2013 FY

2013 FY

2012 FY

Pro-Forma

One-time
items

Normalized

Pro-Forma
EstimateDiff%%in million yen

Sales Volume

Vs. PY

2013 FY

284,014284,014

283,497517+0.18%-0.50%

533,602533,602543,146(9,544)-1.76%-0.61%

287,949(951)

286,998

295,475(8,477)-2.87%

NA245,653

951

246,604

247,671(1,067)-0.43%-0.72%

236,301

63236,364

236,902(538)-0.26%

NAOperating Income

9,352

888

10,24010,689(449)-4.20%+2.40%

Ordinary Profit

8,889603

9,492

10,089(597)-5.92%+4.31%Net Income

11,694(6,001)

5,693

5,336

357

+6.69%+7.42%

COGS

Gross Profit
SG&A*Plan= Nov 14, 2013 analyst presentation

Drivers of Operating Income vs. Prior Year
Production savings offsetting continued top-line pressure from competitive pricing environment and channel
mix trends. We continue to invest in our brands, with DME up +3%. Benefits expense was down as a resultof purchase price allocation related to the CCEJ integration and changes in pension actuarial assumptions.
In million JPY-449-1,057
Elimination ofunrealized
gain in stock-5,813

10,689+5,987+888-1,135
Other
Subs+485-1,808+2,004Other
OPEX

Non-Recurring
Expense10,240DME

Price & Mix
2012 Pro-forma
Operating Income

Benefits
ExpenseSCM
2013 Actual Normalized
Operating Income

15

Drivers of Operating Income Improvement vs. Plan*
In million JPY+240• Production cost reductions partially offset the impact of lower
volume and increased pressure from channel mix.

10,000• Benefit from accelerated OPEX savings more than offset thispressure.

10,240• Estimate for non-recurring items changed vs. 11/14 plan withbetter clarity on the nature of one-time vs. recurring expenses.

2013 Plan Normalized
Operating Income

OI margin 1.86%*Plan= Nov 14, 2013
analyst presentation2013 Actual Normalized
Operating Income

OI margin 1.92%

16

Channel Mix Pressure Accelerated in Q4
FY Volume By Channel(% of total volume)

Channel Volume Growth

Other Supermarket
10%22%
Vending
31%

Eating &Drinking
14%

Drug &Discount
10%

CVS
13%

Total BAPC Volume Growth• Full-Year 2013 +0.18%• Q4 2013 +1.53%

vs 2012

D&DCVS

Local SM

Nat’l SM

Eat & Drink

VM

FY+5%+1%+3%-1%0-2%

Q4+14%+7%+4%-2%0-2%

Category Mix Trends in Q4 Also Diverged
FY Volume by Category(% of total volume)
Sparkling
27%

Tea
20%

Other
12%

Sports11%

Category Volume Growth
Juice 6%

Coffee
15%
Water
9%

Total BAPC Volume Growth• Full-Year 2013 +0.18%• Q4 2013 +1.53%

vs 2012SSD

NSTSports

Water

CoffeeJuiceFY+1%+4%+2%-2%-4%+2%Q4+4%+6%+3%+2%-3%+2%

POSITIONINGFOR GROWTH IN2014

CCEJ Full-Year 2014 Estimate Highlights• OBPPC initiatives driving year-on-year sequential revenue improvement• Capturing continued supply chain synergies to benefit gross profit• Strong OI growth leads to operating margin growth in line with One+ Roadmap
Vs. PY2014 FY2014 FY

2014 FY

2013 FY

Pro-Forma Estimate

One-time
items

Normalized Est

Normalized

Diff%in million yen

Sales Volume(BAPC) (,000 cases)

287,756

287,756

284,014

3,742

+1%

Net Revenue535,800535,800

533,602

2,198+0%Gross Profit

253,900

253,900

246,604

7,296

+3%

Operating Income

15,00015,000

10,2404,760+46%

Ordinary Profit

14,40014,400

9,492

4,908+52%

Net Income

6,400

10,400

5,693

4,707

+83%

OI margin
2.8%

OI margin
1.9%+4,000Drivers of Operating Income Estimate vs. Prior YearIn million JPY+1,122
OPEX-862
DME+4,760-1,297
Depreciation+5,915+100

10,2402013 Normalized
Operating Income

Sales
Increase-218
Non-CoreBusiness

Volume growth forecast of +1% with flat NSR.
Continued supply chain synergy capture as part of ourcommitment to achieve JPY 20-25 billion in savings by2017. Continued investment in marketing in anothertransition year. Increase in depreciation as a result ofthe investments we are making in vending machinesand cold drink equipment.

15,000SCM

2014 Plan Normalized
Operating Income

21REASONS TO

BELIEVE IN

2014

Strategic Priorities
GrowthRealign against
current strengthand future
GrowthSpeed

Synergies

Unprecedented
speed and scopeof change

Reduce costs
and drive
efficiency

Infrastructure

PeopleCreate optimal
operatingstructure

Build a worldclass, modernizedworkforce

23

2014 Growth: Positioning for the Future
GrowthRealign against
current strengthand future
Growth2014

Occasion, Brand, Pack, Price,
Channel Segmentation
Defined Channel
Priorities & Roles

Recruitment,Incidence &Frequency

Over 15
New Packages

Volume (BAPC): +1% to 2%, NSR: even, Market share growth2014 Roadmap: Channel Priorities
GrowthRealign against
current strengthand future
Growth2014

Channel Focus
Vending, Key Accounts, HORECA
Vending Focus on High-Potential Locations• +5,000 net increase of indoor vending machines• Allocate location “hunters” to Tokyo, Kanagawa & Aichi• Leverage energy-saving “Peak Shift” equipment and cashless function

Win in Key Accounts• Targeted key account management with cross-functional account teams

Drive Availability in Hotel, Restaurant and Café (HORECA)• HORECA 15,000 new outlets and 9,000 new coolers• Improve in-store execution using new tools and metrics

Commercial Roadmap: Solid Growth Pillars

GrowthRealignagainst
Coca-ColaJapan
current
strength
System Presentation
andfuture27February
Growth2014

Category Growth Priorities in Alignment
with Coca-Cola Japan
Coffee +1%: Coffee Revival• New campaign “Weekly Georgia” launched in January• New flavor launches: Georgia Katakuna• Win in vending with OBPPC segmentation

Sparkling +2%: Recruitment & Retention Led by Coke TM• FIFA World Cup, Coke with Meals• In-Store & Occasion-Based Merchandising• Coca-Cola Zero Limit Campaign #2Non Sugar Tea +6%: Innovate & Grow to Accelerate Momentum• Sokenbicha 20th Anniversary• Innovation to continue to expand the category

Strategic Priorities
GrowthRealign against
current strengthand future
GrowthSpeedSynergies

Unprecedentedspeed and scopeof change

Reduce costs
and drive
efficiency

Infrastructure

PeopleCreate optimaloperating
structure

Build a worldclass, modernized
workforce2014 Synergies: Enabling the Business for Growth¥5-6 Billion Supply Chain Savings

Synergies

2014 vs. 2013

Reduce costs
and drive
efficiency

2014

~60%
~20%

Strategic
Infrastructure& Manufacturing
Efficiencies• 5 new bottling lines & PET in-line blowing• Insourcing of production (from 65% to 90%)
• Maintenance cost reduction• Improved yield management• Positive environmental impact (water, energy usage)

DynamicLogistics
Operations• Increase in-house warehouse utilization• Expand direct delivery• Optimized truck-loading

Package~15% Optimization& Procurement• Package light-weighting and standardization• Procurement optimization

Strategic Priorities
GrowthRealign against
current strengthand future
GrowthSpeed

Synergies

Unprecedented
speed and scopeof change

Reduce costs
and drive
efficiency

Infrastructure

PeopleCreate optimal
operatingstructure

Build a worldclass, modernized
workforce2014 Infrastructure: Investing for Growth

2014
Infrastructure
Create optimal
operatingstructure

Incremental CAPEX for synergy capture• ¥8 billion incremental CAPEX in 2014

• Currently exploring optimal financing options

2014 Infrastructure: Investing for Growth

2014
Infrastructure
Create optimaloperatingstructure

Consolidation• Consolidating Logistics & Equipment companies• Transitioning from 6 to 2 call centers• Equipment refurbishment facilities• Warehouses
CokeOne ERP* System for Business Transformation• Standardize and integrate business processes
across CCEJ based on world-class bottler bestpractices and SAP-based technology.
• Currently over 183 loosely integrated systems*ERP= Enterprise Resource PlanningStrategic Priorities
GrowthRealign against
current strengthand futureGrowth

Speed

Synergies

Unprecedented
speed and scopeof change

Reduce costs
and drive
efficiency

Infrastructure

PeopleCreate optimal
operatingstructure

Build a worldclass, modernized
workforce2014 People: Transforming for Growth
New Company-wide incentive program rollout
2014
PeopleBuild a worldclass, modernized
workforce

 Pay for Performance: volume, net sales revenue andoperating income
 Greater variable incentive component for more impactful roles

Additional capabilities development
 World-class leadership development for top 120 leaders Frontline leadership training for 500 commercial managers
 Centers of ExcellenceStrategic workforce alignment
 Holistic review of all options for optimizing organization
 2013 voluntary separation plan complete: 50 people impacted
 2014 voluntary separation plan confirmed by Board ofDirectors: 600 eligible population

A CLEARPATH FORGROWTH

Our

Roadmap for Sustainable Growth

2013 Still Early in Our Roadmap

OI Margin+1 pt
2013-20142012-2013

Storming

Forming

Define & deploy
new bus. model

Speed ofintegration: 250+
projects

Identifying
synergies &positioning forgrowth

OI Margin+1-2 pts
2014-2015

NormingOI Margin+1-2 pts
2015-20172017- Tokyo Olympic
Games & Beyond

Accelerating

Performing

Refine &optimize new
business model

Approaching
global bottler
performancelevelsProcess reengineering& launch of ERP
system while
delivering first results

Exploiting newarchitecture ascompetitive
advantage to drivesynergies & growth

Meet & exceed
world-classbottler levels

A world-class
Japanese bottler
on the world stagePerformance
OperationalLong-Term: By 2017

World-Class

Performance Aspirations• Market share#1 NARTD* Market share in our territory• Volume growthGreater than Industry performance• NSR growth

Ahead of volume growth mid- to long-term• OI margin**+4 pts by 2017

EmployeeEngagement

Customer
Satisfaction* NARTD= Non-Alcoholic Ready-to-Drink Beverages

Capabilities** On a comparable basis

Q1 2014 Milestones

Commissioning of two new lines and two new in-line blow molds
Order placement for next four lines to be commissioned in 2015
Completion of call center consolidation from six to two centers (Nagoya, Okegawa)Introduction of new employee performance management & incentive programImplementation of second Voluntary Separation Plan
Kick-off of CokeOne ERP implementation 2/14/2014
Coca-Cola Japan system meeting on 2/27

THANKYOU

Non-Recurring Items in 2013 Full-Year Results
Non-Recurring Items
P/L LineItems

P/L Line2013 FYItems

In million yen

2013 FYIn million yen

COGSElimination of Unrealized
Gain in Stock; AccountingStandardization

951

Extraordinary
Profit

One-time gain fromnegative goodwill

OPEX

Accounting Standardization

148

Extraordinary
Loss

Integration cost

1,425

OPEX

Purchase Accounting-821

Extraordinary
Loss

Other

5,037

OPEX

Restructuring Charges

610

Below OI

Total non-recurring items
in Operating Income

888-12,969-6,001